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Dorsey Sets the Record Straight on Twitter's Priorities

The new CEO outlines five ways to serve its focus of live content in his recent letter to shareholders.

Jack Dorsey's return to Twitter(NYSE:TWTR) was supposed to help turn things around. Instead, user growth has continued to slow to the point where Twitter actually lost users in the fourth quarter.

But in management's fourth-quarter letter to shareholders, Dorsey says the last six months since he rejoined the company were spent structuring the organization and leadership teams to enable better focus. And that focus for 2016 is "what Twitter does best -- live content. Dorsey contends that Twitter does live content better than anyone in the world. He outlined five key areas management is prioritizing to serve its focus.

Refinement of the core serviceTwitter has a steep learning curve. Products such as Moments, which display tweets organized by topic or event, are designed to make the product more approachable. Still, Twitter has a long way to go to make its flagship app as accessible as something like Facebook(NASDAQ:FB).

Dorsey says it plans to change the reply rules, removing the need for the "." before an @reply so the tweet goes out to everyone instead of just the users mentioned. He also mentioned the algorithmic timeline feature the company introduced ahead of its earnings report, which displays the best tweets users may have missed since their last login. Dorsey goes on with product improvement ideas.

The most important improvement to make, however, is with the onboarding process, something the company's been working on for over a year. Dorsey admits there's still work to do in that area as well. The primary goal of the onboarding process should be to teach potential users not only how to use Twitter, but why they should use Twitter. "Why Twitter" has been the focus of CFO and head of marketing Anthony Noto since Dorsey took over, and the company still hasn't answered it. We're waiting.

Live streaming videoAfter acquiring and launching Periscope last year, Twitter quickly became a leader in live streaming video, especially on mobile. But it has work to do to remain the leader. Earlier this year, Twitter integrated Periscope, allowing users to view Periscope videos live inside Twitter. This gave Periscope users access to a broader audience as well as Twitter's ad products.

But Twitter has competition. Facebook, in particular, is expanding its efforts around live streaming video. The company extended the feature to all iOS users in the U.S. after a trial with journalists and celebrities last year. With Facebook's significantly larger user base, Twitter needs to make consistent product improvements to ensure it can keep its live audience.

Catering to creatorsTwitter's value is derived from the core group of users who send out lots of tweets -- tweets that people want to see. That includes journalists, comedians, politicians, musicians, athletes, activists, and more. Providing more tools for those users to connect with their audience will improve engagement among influencers and among their audiences.

Twitter is already losing engagement among some big celebrities who are spending more time on Instagram or Facebook. That's where their audience lives, spending one out of every five minutes on mobile on one of those apps, according to Facebook management.

To compete despite its smaller audience, Twitter needs to find a way to help influencers reach more people. That's where efforts such as the algorithmically sorted timeline can come into play.

Safety firstTwitter continues to battle online harassment on its platform through efforts such as the Trust & Safety Council it announced earlier this month. Harassment is easier on Twitter than on some other platforms such as Facebook, because users can hide behind fake usernames. When users are harassed by strangers on the Internet, it doesn't bode well for their likelihood to return to that site.

Dorsey says the company plans to invest heavily in technology to reduce abuse, make it easier to report, and improve response times. It's also revamping policies to improve its ability to respond and stamp out abusive accounts. At the same time, he says it needs to do a better job of educating users of the safety tools and features available on Twitter as it rolls them out.

While safety measures may help prevent some people from leaving the platform, it doesn't solve the core problems facing Twitter -- mainly growing users.

Invest in developersYears ago, Twitter made the mistake of limiting developers' access to its applications programming interface. The API allows app makers to scrape data from Twitter, such as tweets, followers, or user data, for use in their own projects.

Eighteen months ago, Twitter unveiled Fabric, a new software development kit for mobile apps that integrates Twitter's API, its mobile ad network MoPub, and other unique features. Apps built using Fabric are now used on over 1.6 billion devices, according to Dorsey. These apps are a key piece of Twitter's syndicated audience, which it says reaches 1 billion people every month.

As the total audience strategy becomes even more important in light of the lack of active user growth, keeping developers happy moves up the priorities list.

Author

Adam has been writing for The Motley Fool since 2012 covering consumer goods and technology companies. He consumes copious cups of coffee, and he loves alliteration. He spends about as much time thinking about Facebook and Twitter's businesses as he does using their products. For some lighthearted stock commentary and occasional St. Louis Cardinals mania ... Follow @admlvy